Meticulous financial regulation is the most likely prevention measure…
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The previously abstract concept of the demise of middle class America is now coming into sharp focus… and it’s very disturbing. The financial crisis’ repeated numerous times over the past 30 years have crippled America, and most importantly — it’s middle class society. Deregulation in much of America’s financial industry and the systematic dismantling of the U.S. Federal government (Republican manifesto — ‘Less Government’), is literally offering up the keys of the U.S. Treasury to the greedy hands of the less deserving and the least fiscally responsible individuals — Republican legislators and lobbyists that congenially feed the unregulated money to their wealthy associates. Oh course the GOP strategy is to privatize many government operations and agencies (voucher system for conservative operative organizations), at taxpayers expense… and which virtually seals the ill fate for America’s middle class future prosperity — in favor of the ‘Me Society’ concept of quarterly investor dividend targets. Socialize losses and privatize profits! Lets see how many ways this has been effective — no bid contractors overseas, charter schools diverting public education funding to private enterprise and so called think tanks covertly promoting private enterprise agendas for tax payer dollars. Lately it’s been all about ‘ME’ and reckless greed debilitating America — just like the fall of the Roman empire in 476 AD. It has become a very un-American GOP fiasco (holding the unemployed benefits as hostage/tied to a $700 Billion unpaid for tax cut for the wealthy class — greater than $250,000/yr. or $120.00/hr.), creating little chance/very steep challenges for worthy Americans to move up in socioeconomic status utilizing legitimate means..Way out of the ‘Joe-the-plumber’ economic status! And then if that’s not enough… they dare the American People to take it away, leaving the only option to just settle for the demise of the middle class… all for the sake of multi-million dollar bonuses that the privileged surely deserve over anyone else — especially the tolerant and unresisting you! Aren’t you a wee bit unsettled? This is America — by the people, just in case anyone needs a reminder. Where’s people’s passion anyway? Just maybe it’s time for the wise American People to rise up, be unruly and heard very loudly by this greedy class — that enough is enough already… and just possibly alter destiny. There is relentless strength in numbers to be sure! “Nothing has changed except that we have larger players who are more powerful, who are more dependent on government capital and who are harder to regulate than they were to begin with. We’re in a far less stable environment.” - Nomi Prins |
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Important note: The same banks that were too big to fail before, are now even larger due to the mergers the banking industry went through from those banks or investment firms insolvent, or too weak to survive on their own
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Use the Federal spending as an excuse to cut the things government does for ‘We, the People’ — Fox News
What’s truly lacking from the financial reform, and from the political debate regarding it… is the complete absence of real discussion concerning the most obvious — roll back of the financial de-regulations.
Why so smug? … because any debate about past financial regulations would simply ridicule just how pathetic the current financial reforms really are, and how the U.S. Congress has done little to prevent the financial fiasco from happening again. Much bark with very little bite.
Even after trillions of dollars of Federal Government bailouts and guarantees at the U.S. taxpayer expense, banks have used that very same taxpayer bailout money to thwart (bite the hand that feeds you), any meaningful reform legislation through their legendary legion of lobbyists — ‘5’ financial industry lobbyists for every member of Congress… while returning to the same risky investment practices as before, and at an even greater level than ever.
Moreover — Wall Street used the TARP money to give themselves huge bonuses at tax payer expense. You would expect rioting in the streets like the world witnessed in France and Greece. Were Americans simply content playing with their cells phones while their tax dollars heroically rewarded those greedy white collar thugs for running the U.S. economy into the ditch?
Where/when did the American people lose their moxy and become so acquiescent being told to go to the end of the line and just have a do-over by some self-designated bully, whose desire is simply to possess you by confiscating all the capital within sight for their own — and rules the day?
Hidden in Plain Sight
So what’s missing from the financial reforms recently passed & signed into law — limits on executive compensation, an idea that America is fighting on a global scale. The European Union (EU), finally got financial executive compensation capped through legislation in 2010.
Additionally, there is the comical half-hearted attempt at regulating the financial rating agencies (that are compensated for their ratings, by the very people they rate), you know — the people who got paid to say that subprime mortgages were “safe” and rated them AAA shortly before the very companies were declared insolvent.
The Dodd-Frank financial reform act of 2010 is suppose to require the financial rating agencies to be governed by expert liability under the securities laws — the same as all the securities firms and investment banks (which are now for the most part deposit gathering bank-holding companies), as well as lawyers and accountants who are also required to operate under. You know ‘expert liability’ — if nothing else but for the sake of the general public NOT getting the royal screw.
The Dodd-Frank Wall Street Reform and Consumer Protection Act required that the financial ratings agencies assigning grades to asset-backed securities be subject to ‘expert liability’ from the moment it was signed into law. This subjected the ratings agencies to lawsuits from investors… a policing mechanism that law firms and accountants have also contended with for years. The ratings agencies then responded by refusing to allow their ratings to be disclosed in asset-backed securities deals.
… more on this here — http://www.nytimes.com/2011/03/06/business/06gret.html?_r=1&hp
So lets imagine if these proposals were actually implemented, which isn’t going to happen, but should — it still wouldn’t be enough.
“The American regulatory structure is in total disarray and what has been proposed to fix it is substantially only partial, and even then there is heavy resistance for reform,” said Hal Scott, Nomura Professor on International Financial Systems at Harvard Law School.- “I don’t see us coming out with any significant change to the structure.”
Their answer is basically a permanent TARP — states Philip L. Swagel
The available options are few — to reduce the size of these securities firms and investment banks (which are for the most part bank-holding companies now — to borrow money discounted from the Fed and also to be eligible for government bailout money), where they are no longer too big to fail and then let em, or put financial regulations into place that absolutely, positively won’t allow a financial crisis like what happened in 2007–2008 to ever happen again. No more window dressing or banner headlines with no substance to back it up, and NO more federal government bailouts!
Action will define if America has a place again at the world leadership table with the responsible adults and away from the lobbyists selfish desires. There are important lessons to be learned and acted upon.
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